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CONFIDENTIAL
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PRIORITY FOREIGN AND COMMONWEALTH OFFICE TO CERTAIN MISSIONS
Guidance No. 20
27 January, 1969 (G)
Cose
27/1
22
CONFIDENTIAL
The UNCTAD scheme for Generalised Preferences and existing preferential arrangements:
The Problem.
One of the major results of the second United Nations Conference on Trade and Development early in 1968 was agreement in principle to the establishment of a scheme whereby developed countries would give non-reciprocal tariff preferences to imports of manufactures and semi-manufactures (including as wide a range of processed agricultural products es possible) from all developing countries. The developed countries are at present seeking agreement on the details of a mutually acceptable scheme in an O.E.C.D. Working Group. 2. A possible obstacle to agreement among the developed countries is the insistence on the part of the United States that the preferences enjoyed by some developed countries in the markets of some of the developing countries should be phased out over a period of time; the Americans argue that unless such a condition is fulfilled it is very unlikely that Congress can be induced to pass the necessary enabling legislation and they will be forced into serious consideration of a selective preferential arrangement with Latin American countries. They have put pressure on us, not only in the O.E.C.D. but also through their Embassy in London, to take the initiative in declaring a readiness to give up the preferences that we receive from certain Commonwealth developing countries, claiming that such a move by us would help to counteract the growing wave of protectionism in the U. S. They have exerted similar pressure on other Governments which enjoy preferences in developing countries (e.g. Australia and New Zealand). They have also urged certain Governments who have an interest in the scheme (e.g. Japan) to press us for a statement of our intentions.
3. The Americans can be expected to approach EEC Governments (if they have not already done so) for similar statements of intention with regard to their preferences to the Yaoundé Associates in Africa and the preferences they will enjoy in Nigerie and the Commonwealth East African countries of Kenya, Uganda and Tanzanie, if the association agreements with these countries are re-negotiated and ratified. It is possible that some Governments who have been approached by the Americans on this subject will wish to know our views on this question.
Line to take.
4. If questioned on this subject, you should explain that in our view it is somewhat unreasonable for us to be expected to make any declaration at this stage about the future of cur preferences in developing Commonwealth countries.
We do not
CONFIDENTIAL